From: matthew.robb1@ntlworld.nospamta.com
Newsgroups: uk.politics.misc uk.finance
Subject: Re: Will sterling take a beating this week ?
Date: Wed, 29 Mar 2006 10:06:58 GMT

On Wed, 29 Mar 2006 10:15:13 +0100, hummingbird
 wrote:

>>>>Thus real return on the currencies are 4.75 - 3.6 = 1.15% ($)
>>>>
>>>>and 4.5 - 2.4 = 2.1% (£)
>>>
>>>How does domestic US or UK inflation affect foreign speculators?
>>
>>A £ is only worth what it will buy.
>
>I believe you but Mel was referring to foreign investors in US assets.
>
>Eg: if I buy a $1million of US bonds and sell them one year later,
>how is my investment affected by US domestic inflation?
>I started with sterling and ended with sterling and none of the money 
>is spent on goods/services within the US.

The exchange rate with sterling will fall during the year if the US
(actually the dollar) is experiencing inflation

-- 

cheers

matt